We have previously characterized intracisternal A-particle (IAP) genes as retrovirus-like elements and shown that they are extensively reiterated in the cellular DNA of Mus musculus and some other rodent species. IAPs are not known to have an infectious extracellular phase and are genetically distinct from the commonly recognized murine leukemia and mammary tumor viruses. Recently, we have confirmed by nucleotide sequence analysis that IAP genes have a retroviral form of long terminal repeat unit (LTR) and are bracketed by short duplications of cellular sequence, suggesting that these genes have been integrated in a manner ascribed to retroviral proviruses and certain other transposable elements. We have also found that cloned IAP LTRs can promote gene expression when introduced in an expression vector carring the bacterial gene chloramphenicol acetyl transferase. The appearance of IAP gene copies in novel genomic locations has been directly demonstrated in the past year. In one case, insertions into Kappa-light chain genes resulted in defective gene function. In another, an IAP gene insertion resulted in rearrangement and activation of a cellular oncogene. Thus IAP genes constitute a source of genetic variability in the mouse and may have a role in cell transformation and/or tumor progression.